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*Special thanks to contributing writer Gunnar Gunnarsson, General Manager of the AECA in Moscow, for providing the below article.*

Of the 27 key services provided by the American Embassy Community Association (AECA) in Moscow, Russia, the cafeteria continues to be the biggest challenge.  There are valid reasons for this.  One cafeteria can hardly cater to all the needs and preferences of our large membership. One person wants something prepared in a certain manner, while another wants it prepared differently. There is endless debate over what should be prepared, how it should be prepared, if cheaper options should be available, and so on.

How can we convince our members that we are doing things right?  How can we offer the best and be the best we can? 

Over the years AECA has developed several techniques that not only help us improve our operation, but show members that we are running a quality operation with highly skilled professionals.

The starting point is the general cafeteria survey that we conduct twice per year – an extensive survey in the fall and an abbreviated version in early spring. We also have a suggestion box in the cafeteria at all times.  The most frequently received comments in the surveys relate to our selection, quality, cooking methods, and, 

of course, the prices.  The surveys help us monitor the changing preferences of our members, and equally importantly show our members that we are listening to them. 

Apart from the general surveys, we also use specific surveys such as:

**“Create Your Own Menu”** - This survey lists the most popular meals with additional space where members can add personal choices.  Members rate the meals in order of preference and provide comments on how they would like the meals prepared. Combining this information with historical sales figures, through statistical analysis we determine how often a particular meal should rotate though the menu.

**“Create Your Own Meal”** - We ask members to donate favorite recipes, using categories such as Soup of the Week, Favorite Salads, and Traditional American, Oriental, Mexican, and Russian meals.  We serve the meal several times, and if sales results and feedback are positive, it becomes a part of the regular menu.  This is a high-profile survey, with special flyers containing the winning recipes and photos of the donator.  Members providing winning recipes receive a free meal.  We have received many good recipes this way, and it has increased the transparency of our processes.  

**Special Interest Surveys** - These surveys are used to encourage feedback on specific items in our menu such as vegetarian meals, sandwiches, and “made-to-order” options.

Surveys alone are not sufficient; we also need to keep our customers informed by publishing the results, and taking action on them.  People need to see changes frequently.  We have noticed that the more often we make changes, the more satisfied our customers are.  Changes can come in almost anything - the menu selection, cooking methods, furniture and equipment locations, and special theme nights.  In Moscow, such things are rotated every two years, as a one-year cycle has proven too short and involved too much repetition.

Conducting surveys, performing statistical analysis, and making changes will not always keep members happy.  In 2003, we took the extra step of inviting a respected independent consultant from the U.S. to meet with customers, staff, and management.  After researching over 30 consulting firms, we selected Ron Yudd, whom some of you may remember from the last CR conference.

One week prior to Ron’s arrival, we distributed questionnaires and promotional flyers to Embassy apartments and hung large posters in all Embassy buildings.  The results were immediately evident.  Even before Ron arrived, we noticed that many members’ attitudes toward the cafeteria improved based on their expectations of change.  Additionally, we specifically invited the cafeteria’s greatest critics to meet with Ron, so that no one could argue that they were not a part of the project.  At the end of the visit, Ron gave a presentation on his findings at an open meeting and answered questions.

Upon his departure, Ron gave us 20 recommendations to implement during the next two weeks.  Then several days later, we received from him a 17-page report addressing some 250 points of interest with his recommendations.  We call this report our “One-Year Cafeteria Improvement Plan.”  The report listed month-by-month completion milestones, the name of the person responsible, and a status form for tracking progress.  Less than a month after Ron’s departure, the customer-satisfaction rating of our cafeteria had clearly improved, and we continue to hear more positive comments than ever.  

Running a cafeteria can be a big challenge for any employee association; but with a customer service mindset, innovative ideas, and a motivated staff, success, and indeed customer satisfaction, is achievable.

*While most associations cannot afford to hire a consultant from the US, this article provides a good blueprint for those who wish to improve food service operations.  For additional guidance regarding cafeteria operations please contact the CR Operations Team at**foodandfun@state.gov**.*****

The Office of Commissary and Recreation Affairs (CR) would like to take time out to thank all those associations who have remitted the 2003 annual assessment fee.  It is greatly appreciated!  

      That said, there still remains a small portion of associations who have yet to remit payment.  If you have not received a confirmation acknowledging receipt of your payment, please contact the CR Accounting Team - foodandfun@state.gov.  We look forward to hearing from you!

***Increase Profits***

***by***

***Reducing Costs***

Most every employee association would benefit from cost reduction.  To develop a successful strategy to reduce costs, association management must look at each cost currently incurred by the association and ask the question, “What specific ways can this organization reduce costs?”  Some potential cost-cutting areas include: 

· Inventory costs (transportation, cost of inventory, and loss or spoilage)

· Personnel costs (man-hours used in handling inventory, stocking shelves, cashiering, bookkeeping, cleaning, technological maintenance, and marketing)

· Miscellaneous costs (bank fees, check cashing fees, exchange gains and losses when working with various currencies) 

· Customer service and marketing costs 

· Technology costs  

Management must identify specific means of cost reduction.  Specific means of cost reduction should be broken down into long or short-term objectives.  In the area of inventory for example, a long-term objective would be to reduce product spoilage.  The short-term goals involved in this long-term objective may include purchasing less, moving to a just-in-time (JIT) inventory system (the association purchases goods “just in time,” as they run out rather than keeping a stockroom full of inventory), and progressively marking products down several months before their expiration date in order to move stock.  Think of it as a triangle: the organization’s strategy (reducing costs) at the large bottom, objectives in the middle (purchasing less, JIT inventory, cutting prices on products *before* they expire), and day-to-day goals in the small tip of the triangle (keep the next order under X dollars, pull near-expired goods once a week, etc.).  

With some fiscal discipline, management can cut costs, increase profits, and make better use of the association’s money for the good of the membership and community.

*The above article was written by CR Operations Officer Christy Grimste.*

#     Frequently    

#     Asked 

#     Questions

Each month, we receive many different questions from association managers, post management, Boards of Directors and sometimes members about employee association operations.  Not every question is as unique as one might think.  In fact, many of you have the same concerns, comments and/or questions.  We thought we would share some of those with you along with our guidance.

**Q:  *Can FSNs purchase duty-free goods?*  Employee association members must have duty-free privileges to purchase *packaged* duty-free goods, but when a good is no longer packaged, rather it is open and consumed directly on site; even those lacking duty-free privileges may have access.  As such, Foreign Service nationals (FSNs) may purchase “open” duty-free goods, provided the goods are sold separately in single serving for consumption on the premises. For example, open alcoholic beverages sold at a happy hour or hot-dogs sold at a BBQ.  Or, in an association’s commissary or snack bar, *one* individually wrapped candy bar could be sold as an open duty-free good, but not a package of individually wrapped candy bars.  We should emphasize that these guidelines should be strictly adhered to so that the mission’s duty-free privileges are not jeopardized.

Q:   *Can the spouse of a Board member serve as the Association manager or bookkeeper?*It is not recommend.  Even where no direct supervision is involved, there may still be concern how these two roles interact.  Besides being a potential internal control issue, this is a conflict of interest.  One of the functions of the board is to collectively make decisions regarding the manager and bookkeeper in terms of pay and compensation, disciplinary actions, and performance reviews.  

Q: *Should we charge our members refundable deposits or nonrefundable fees?*Refundable deposits are generally recommended for newly establishing associations or those that need some additional working capital.  Non-refundable fees are typically in place as a source of ongoing income and are typically tied to the use of specific services/facilities/activities.  Fees may be structured in several different ways:  1) one fee for the entire tour, 2) a pay-as-you-go fee, or 3) an annual or monthly fee.  The first raises the question of what to do when someone extends or shortens his/her tour, while the second option can be very labor intensive.  The third option may be the best compromise.  However, there is no one-size-fits-all for employee associations when determining a deposit and/or fee structure.  You should take into consideration such things as the association’s financial health, number of employees, number and types of services, location of facilities, and whether goods and services available on the local market

*Do you have a question you think should be included in our next FAQ’s?  Email Assistant CRonicle Editor Christy Grimste with your suggestions at**foodandfun@state.gov**.*

Managing an employee association for the first time can be a daunting experience, to say the least.  We’ve collected tips and helpful hints from seasoned managers around the world about things they wish they had known when they started managing their Association and developed a “Manager’s Checklist.”  Below are a few key points, but the entire list is available on our internet website (www.state.gov/m/a/c8225.htm) under the Management Resources page, or by simply contacting us and requesting it.

· Keep abreast of annual reporting requirements – know what is due and when (you can find this list on our website and on the next page of this newsletter).  Find out which requirements you will be responsible for; some boards handle all requirements themselves, while others task requirements to the general manager.

· Remember that your customers will expect American standards of customer service and work with your staff to achieve this high standard.

· Read the Board of Directors Handbook, available from our internet and intranet sites.  Make sure each of the members of your board has a copy as well.

· Make sure a board member is performing spot-checks of the association’s cash and inventory at least once a month.  If there are no internal controls in place, the general manager will be the first person to be blamed if something goes missing.

· Read the quarterly newsletter, “*The CRonicle*.”  The newsletter provides a wealth of information.  Archive issues can be found on our internet site.  

· Take your pricing structure seriously and do not lower prices unless you are certain the association can handle it financially.  Pressure from members or hopes that lowering prices will draw more customers (which almost never happens!) are NOT good reasons to lower prices.

· Maintain an organized central filing system.  Guidelines can be found on our website in the “Rules and Regulations” page under collective cable 01-008 – Establishment of Central Files and Retention of Files.

· Familiarize yourself with the association’s operating documents (i.e., charter, bylaws, and license agreement), Post Profiles, employee contracts / positions descriptions,**membership list, budget, financial statements, and insurance policy.

· Familiarize yourself with 6 FAM 500 – the section of the **F**oreign **A**ffairs **M**anual on employee association operations.  

Finally, if you don’t know something, don’t be afraid to ask questions of your board or of CR. We, like your board, want the association to succeed.  The CR staff can always be reached by phone (1-202-663-1330), fax (1-202-663-1329), or email (foodandfun@state.gov). 

*The above article was written by CR Operations Officer Christy Grimste.*

### HAPPY

###      ST. PATRICKS

###                DAY!! 

### The next issue of the CRonicle will be published in April/May 2004.

“We have noticed that the more often we make changes, the more satisfied our customers are.”

 FAQs

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2004 Reporting Deadlines

May 1

Association Prepared Financial Statements (Jan. - Dec. 2003)

Audit Report (CY01) with Auditor Prepared Financial Statements and Auditor's Management Letter

Update Post Profiles 

June 1

Compliance Certification

August 15

Association Prepared Financial Statements (Jan. - June 2004)

November 1

Assessment Payment – Based on Calendar Year 2003 Gross Revenue

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The Cafeteria   

     Challenge

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